How to Trade XRP
Trading cryptocurrencies requires some learning before you get started, and XRP is no different. While you’ll naturally pick up new skills with more practice, the best way to get a base of knowledge is by consuming reputable online content.
On this page, we’ll teach you how to start trading XRP. For those that know what you’re doing, see the table above. And if you don’t, keep reading to learn everything you need.
And without further ado, let’s get started.
Best XRP trading brokers
Finding places to trade XRP is a little trickier than other major cryptocurrencies. However, you’ve still got a few options – and we’ve listed the best brokers for you below:
How to trade XRP
To trade XRP successfully (and without compromising your online security) you need to keep a few things in mind. The sections below will tell you all you need to know when trading the cryptocurrency.
What do I need to trade cryptocurrency?
To trade cryptocurrencies, you need a basic knowledge of online trading. You don’t need to be Warren Buffet yet, but you should at least know what is and isn’t a good idea.
You’ll also need to pick a platform to trade your coins from. Exchanges and brokers are the most secure choices and provide a broad range of cryptocurrencies to choose from. A couple of varying factors will affect your decision, such as your strategy and the coin you want to trade.
Where do you trade cryptocurrencies?
You can trade cryptocurrencies on different online platforms. The two most common are exchanges and contract for difference (CFD) brokers. Below, you’ll find a quick summary outlining the difference between these platforms:
Exchange: An exchange is a platform where you can buy, trade, and sell various cryptocurrencies. You can use these to purchase cryptocurrencies with fiat currencies (e.g. GBP), along with trading between different cryptocurrencies.
CFD Broker: A CFD broker allows you to buy an asset rather than one whole cryptocurrency coin. You can use these platforms to speculate on market trends and sell when you think you’re in to make a profit.
For both exchanges and CFD brokers, offerings will differ depending on the platform you choose. So, it’s worth doing your research to ensure you pick the best option.
Should I trade cryptocurrencies?
Ultimately, trading cryptocurrencies is your choice. If you don’t want to, you can always try buying them instead, or look at another form of investing.
If you choose to trade cryptocurrencies, we suggest educating yourself beforehand. You can read articles, watch videos, and listen to podcasts to learn more. It’s also worth testing with a small amount of disposable income to see if trading is the right choice for you.
We’ve got plenty of resources on our website to help you make a choice that’s best for you.
What is the best way to trade XRP for a beginner?
If you’re a beginner, you’re better off trading XRP using a CFD platform. Doing so has several advantages, including:
You don’t need to store coins
You don’t need to buy coins, which can get expensive
You might not need to pay as much tax in some cases
Once you’ve become familiar with XRP, you can move on to using an exchange.
How to trade XRP using a broker
Before we continue, it’s worth noting that you don’t need to use a broker for trading XRP. You’ve got plenty of options which you can find higher up on this page.
When choosing an XRP trading platform, you need to think about security, fees, and other factors like ease of use.
If you still decide that you’d like to trade with a broker, though, you’ll find the steps to doing so below:
Open an Account With Your Broker: Signing up is easy and consists typically of giving your name, email address, and so on. When you’ve created an account, you also need to complete a know-your-customer (KYC) check. It’s essential that you follow all of the necessary safety procedures and that you don’t offer information if you’re asked for anything unreasonable.
Deposit Funds Into Your Account: You need to add money to your account to begin trading. Choose your payment method — most brokers accept cards and bank transfers. Once the money appears in your account, move on to the next step.
Plan Your Trading Strategy: You must think about your trading strategy, and sticking to the original plan is always the best option. Generally, there are four main trading strategies:
Day Trading: Day trading involves buying and selling the same asset in one day. This strategy also covers buying and selling more than once in a single day.
Swing Trading: Swing trading involves speculating on market trends. Compared to day trading, this can last days or months.
Scalping: Scalping is a short-term strategy that looks at where assets’ values have fluctuated before buying and quickly reselling.
Automated Trading: With automated trading, you set criteria that need to be met before you buy or sell an asset. Once the market reflects this, your system will automatically do the rest.
Place Your First Trade: Great! Your funds are in, and your plan is made. Now, you’re ready to place your first trade by selecting the “Buy” option on your platform’s interface. You can use leverage to pay less than the whole investment, but be careful because this strategy is risky if you don’t know what you’re doing.
How to trade XRP using an exchange
If you want to buy coins and trade them, you should use an exchange. Unlike CFDs, these require more knowledge of cryptocurrencies. You should also use a wallet to protect your coins in case a security breach occurs.
The biggest exchanges let you trade various cryptocurrencies, with some offering XRP. Here’s everything you need to know about trading XRP via an exchange:
Choose Your Exchange: Similar to a broker, the first step is to select an exchange. When it comes to exchanges, some are simple and allow you to buy a few cryptocurrencies using fiat currency. Other platforms, however, offer a very wide range of crypto-to-crypto trades.
Set Up an Account: Once you’ve chosen a platform, you’ll need to set up an account. To do this, you’ll need to provide your name, e-mail address, and so on. Often, you’ll need to verify your identity using a document like your driving licence or passport. Once you’re set up, you can fund your account with money.
Select Which Cryptos You Want to Hold and Trade: You’ll need to select which market you want to buy your cryptocurrency coins in. These are based in pairs, such as BTC/GBP and XRP/BTC, similar to a fiat currency exchange. If you’re new, it’s best to start by buying well-known coins using fiat currency.
Place Your Trade: Once you’ve selected the market and cryptocurrency you want to trade, you’ll need to place your trade. Some of the options you can choose include:
Market Order: If you want to buy immediately at the current fair market rate, choose this option
Put Option: When you buy a put option, you can sell your assets before a specified date. However, doing so is not mandatory.
Limit Order: With a limit order, you can sell your XRP coins once the market rate hits a specific price or higher
Selling a Call: When you sell a call, the buyer will pay for the right to own what you’re selling at a specific price within a date range. You’ll do this if you don’t see your currency performing well in the future.
Receive Your Coins: Okay, so you’ve bought XRP. Now, depending on whether you intend on longer-term investments or not, you may also wish to consider the steps below.
What are the alternative ways to get XRP?
While centralized exchanges and CFD brokers are the most accessible places to trade, buy and sell XRP, you don’t need to use these if you don’t want to.
Keep in mind that you can’t buy XRP on decentralized exchanges. However, you can use one other alternative. We’ve gone into depth about this option below:
Peer-to-peer (P2P) marketplaces allow you to sell XRP directly to the other user. These platforms work in a similar way to when you buy items from a marketplace like eBay.
P2P marketplaces allow you to talk to the buyer before you purchase XRP. While you can pay online, you can also meet the buyer in person and exchange via cash in some countries.
One famous example of a P2P cryptocurrency marketplace is Binance.
Better market rate
Help from the platform provider if there’s a dispute
Transactions might take a little longer due to messaging delays, etc.
Scams are more common
XRP is a little different from Bitcoin, Ethereum, and some of the other prominent cryptocurrencies. Rather than being designed for direct consumer use, its founders launched the currency to compete with SWIFT payments.
Trading XRP is trickier than doing so with some of these other currencies because you’ve got fewer options when it comes to trading. On the flip side, though, these platforms are pretty secure.
XRP has the potential to be a wise investment if you’re trading for the long run. However, if you plan on using a more short-term strategy, consider looking elsewhere.